North and South Dakota

The Dakotas have a rich, shared history between the two states, with much of its territories being the ancestral lands of Native American tribes. Native Americans, as well as other cultural and religious groups, are particularly vulnerable to affinity frauds and financial scams, such as Ponzi schemes. Malecki Law is a securities fraud law firm that can provide legal representation to North and South Dakotans, as its securities fraud attorneys have extensive experience investigating and litigating against perpetrators and industry enablers of investment scams and financial affinity frauds. Our firm has recovered tens of millions of dollars for seniors and other retail investors caught up in Ponzi schemes perpetrated across the U.S. and abroad.

The Securities and Exchange Commission (SEC) issued an Investor Alert regarding affinity frauds and Ponzi schemes, explaining that:

“Fraudsters who carry out affinity scams frequently are (or pretend to be) members of the group they are trying to defraud. The group could be a religious group, such as a particular denomination or church. It could be an ethnic group or an immigrant community. It could be a racial minority. It could be members of a particular workforce—even members of the military have been targets of these frauds. Fraudsters target any group they think they can convince to trust them with the group members’ hard-earned savings.” 

Malecki Law’s securities fraud lawyers know, first-hand, that affinity frauds are frequently associated with Ponzi schemes, wherein perpetrators take advantage of the trust and commonalities from members of the group to solicit funds for a fake investment, as the SEC further explains:

“Affinity fraud almost always involves either a fake investment or an investment where the fraudster lies about important details (such as the risk of loss, the track record of the investment, or the background of the promoter of the scheme). Many affinity frauds are Ponzi or pyramid schemes, where money given to the promoter by new investors is paid to earlier investors to create the illusion that the so-called investment is successful. This tricks new investors into investing in the scheme, and lulls existing investors into believing their investments are safe. In reality, even if there really is an actual investment, the investment typically makes little or no profit. The fraudster simply takes new investors’ money for the fraudster’s own personal use, often using some of it to pay off existing investors who may be growing suspicious. Eventually, when the supply of investor money dries up and current investors demand to be paid, the scheme collapses and investors discover that most or all of their money is gone.”

Following the Indian Trust Settlement class-action lawsuit in Cobell v. Salazar, the SEC issued an Investor Alert regarding investment scammers that were specifically targeting Native Americans who received a settlement payout from the case. The North Dakota Securities Department has issued its own investor advisory regarding affinity frauds, highlighting one feature that helps the frauds continue and go underreported: “Frequently, victims fail to report the fraud to avoid embarrassment or because they want to handle it within the group, allowing scammers to prolong their schemes.” Malecki Law’s securities fraud attorneys empathize because we know that feelings of embarrassment and shame are frequently associated with being defrauded, but there should be no shame. Fraud can happen to anyone. The important thing is to get help from the right places to give yourself the best chance of recovering lost investment funds.

Malecki Law is a securities fraud law firm that has handled numerous securities litigations, arbitrations, and mediation cases involving affinity frauds and Ponzi schemes, having received record settlements and awards. Our team has a keen eye for fraudulent practices designed to circumvent firm compliance and supervisory controls of financial entities who have a duty to supervise customer accounts and their advisers, as well as to be on the alert for suspicious activity involving customer funds. North and South Dakota investors belonging to a religious or cultural group are especially vulnerable to affinity frauds, however, anyone can be defrauded. If you or anyone you know has been solicited with questionable schemes or have questions about possible suspicious activity in your investment accounts, schedule a free initial consultation with Malecki Law, by calling (212) 943-1233, or emailing jenice@maleckilaw.com.